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Meta Platforms Stock Update
Meta Platforms (NASDAQ: META) has seen its stock decline due to rising concerns about increasing AI expenditures following its third-quarter earnings report on October 29, 2023. The company plans to invest an additional $600 billion in its infrastructure and jobs by 2028 to enhance its AI capabilities, which may temporarily affect profit margins.
As of September 2023, Meta reported an average of 3.54 billion daily active users across its family of apps, up from 2.82 billion in December 2021. The company experienced a revenue growth of 16% and an operating margin of 35% in 2023, although its EPS increased by 73%. Despite the challenges, analysts project a compound annual growth rate (CAGR) of 18% in revenue and 12% in earnings per share from 2024 to 2027.
Meta’s CFO Susan Li has noted that the increased spending is intended to build a robust AI infrastructure that will bolster targeted advertising and user engagement. The stock is currently valued at 21 times next year’s earnings, indicating potential for long-term growth despite short-term volatility.
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